How can deflationary tokenomics sustain price for a layer-1?

[Stella.T]

I’m trying to evaluate a potential investment in a new layer-1, and their whitepaper keeps emphasizing the token’s **deflationary tokenomics** as the main driver for long-term value. I’m skeptical because simply burning a portion of transaction fees doesn’t guarantee adoption or utility. Has anyone actually seen a project where a decreasing supply model successfully sustained price during a prolonged bear market, without other fundamentals?

[James96]

I’ve looked at a few projects that pitched deflationary tokenomics and a steady burn of fees as the main value driver. In bear markets the price mostly followed macro sentiment, and the burns barely slowed the drop when there wasn’t real usage or liquidity.

[AdamYW]

I tried tracking on chain activity vs price for a couple of these, and when daily active users cratered, price tanked even with a steady burn. People talk about scarcity, but investors still sell when there’s no demand or clear roadmap.

[ScottYR]

Is the real problem maybe demand or utility rather than supply? If users aren’t using the network, who’s left to buy and hold when burns stop?

[Tyler33]

A memory from a forum thread: someone bragged about huge burn events during a hype cycle, but when a bug hit or fees rose, liquidity dried up and merchants left. I ended up testing with a small position, and it felt more like sentiment betting than fundamentals.